Sony Won E3 (But That Doesn’t Matter)

Sony executives seemed to be treating E3 like a victory lap. But the battle hasn't even begun. Photo: Ariel Zambelich/Wired

LOS ANGELES — It was a moment that will go down in the E3 history books.

After a day full of perfunctory fanboy whoops and polite applause for the appearance of all-too-predictable games and characters at the annual Monday slog of back-to-back-to-back-to-back press conferences at the Electronic Entertainment Expo last week, Sony CEO Jack Tretton strode onto the stage to proclaim that PlayStation 4 would play used game discs.

Anyone who does not obsessively follow news of the gaming industry would be nonplussed to see what happened next. The crowds of PlayStation faithful (some of whom, Tretton had told us earlier in the night, had waited outdoors for three days to get into the Los Angeles Memorial Sports Arena) erupted into cheers. But not the sort of press conference applause that ends as quickly as it began, the better to let the presenter get on with reading the next bit of news off the prompter. No, this was sustained, heartfelt applause, the kind usually reserved for rock concert encores.

The ability to play used games is not new; every game console since the invention of game consoles has been able to do it. Sony is promising a lot of whiz-bang new features for PlayStation 4, but the announcement that got E3’s only standing ovation was the status quo.

The crowd was never-ending at the Sony booth at E3. Photo: Ariel Zambelich/Wired

Sony, having spent the last 7 years playing catch-up with Xbox 360, was happy to make a big show of kicking Microsoft while it was down, even going so far as to release a needling parody video that has now been viewed over 12 million times. Sony came out of E3 smelling like a rose, and it wasn’t just because PlayStation 4 will have fewer restrictions on content sharing. The quality of games at the PlayStation booth was astonishing, from massive productions to rows upon rows of new indie games. Sony said it would allow smaller developers to self-publish on PlayStation 4, whereas Microsoft said it would not. Microsoft is not making the case for how any of its policies will directly benefit gamers, and Sony is promising gamers everything under the sun.

When one puts it that way, one starts to wonder what the other 6 percent of Amazon’s Facebook friends were thinking. They must really like Halo.

Sony rode out of E3 triumphant; this is inarguable. The thing is, that doesn’t really matter. Microsoft has a tougher road ahead of it than it anticipated it would, but to sit back, cross one’s arms, and declare the console war over would be ludicrous at this point.

The companies that have fared the best in the technology world understand the maxim that your customers cannot articulate to you everything they want. Yes, you should listen to the people who use your products (and you should listen just as closely to the ones who do not), but you cannot simply ask people what they want you to make, then make it; that’s how you end up with The Homer. Nobody asked for iPhone. Even after that, nobody asked for iPad. And nobody-but-nobody ever asked for a Nintendo DS.

Microsoft is at a disadvantage in the PR wars because it has a fan base of millions of players who were looking forward to upgrading their experience. Microsoft can say all it wants is that it’s really looking to introduce a totally new kind of product, but it’s spent the last decade building a loyal army of Xbox owners who were expecting something approximating an uninterrupted continuation of service. From their perspective, Xbox One is more of a downgrade, and Microsoft did not make its case for how the changes made to the Xbox One would be a net benefit to gamers.

But it isn’t going to reverse gears at this point. Microsoft, I believe, is not interested in killing off the private sale of used games, or forcing players to log in once a day. That was all just collateral damage. The real goal was to create an all-digital game console on which every game is registered to an account.

Microsoft is playing the long game with Xbox One. It’s not content with fighting and scrabbling and inventing new promotional offers in an attempt to get more Xbox owners signed up for Xbox Live and using its online services. It’s guaranteeing 100 percent online connectivity by requiring it. Microsoft will also know every single game every single one of its customers own — the better to sell them more. And once you’re used to the idea of all your games being installed onto your hard drive, they can wean the disc diehards off of physical goods and move them onto downloads, which cut out the middleman and put more money into the hands of the game publisher (and Microsoft).

It’s not just Microsoft that’s taking a calculated risk here; Sony is too.

Sony, in tying the ownership of games to discs rather than accounts, is giving players more freedom but is delaying its own ability to go all-digital.

It’s not just Microsoft that’s taking a calculated risk here; Sony is too. I reached the conclusion last year that the game console is dead. Microsoft would seem to agree wholeheartedly with this idea, since it seems to be done making anything that you or I would recognize as a game console. If we take Sony’s announcements at face value, gamers can treat PlayStation 4 exactly as if it were an Atari 2600. Buy games, pop them in, sell them when you’re done. You can opt in to the online services or downloadable games, but these are extra value-adds, not necessary conditions.

Xbox One is nothing like that. You are required to have an online customer account to which your game ownership is tied. For whatever reason — whether it sees the game-box business as being dead in the water or because it dreams of building something that is bigger than just games — Microsoft believes it is time to change the whole paradigm.

Meanwhile, Sony seems to believe that its issues with PlayStation 3 were not at the fundamental concept level, but just a matter of degrees. The whole operation doesn’t need to be turned upside down, goes the thinking, just tweaked: Change the price point to something more palatable, make the Dual Shock controller more ergonomic, simplify the system architecture.

Onlookers crowd around the PS4 at the Sony booth. Photo: Ariel Zambelich/Wired

Is that truly enough? Or is Sony just rearranging the deck chairs on the Titanic? All the goodwill from gamers in the world won’t matter if Sony can’t turn a profit off PlayStation 4. If you think that alternative gaming platforms are eating the console makers’ lunch now, what do you think will happen as we get deeper and deeper into this console generation?

One thing we should learn from the last few years is that we should be settling in for a long, long console generation. Xbox 360 was released in 2005, PlayStation 3 in 2006. There’s no reason to think that this generation won’t be even longer than that. If you’re designing and manufacturing a new console, you’re not making money, you’re spending it. Sony and Microsoft want to get these boxes out and start generating cash — sooner than they did with the last round of boxes.

And until those boxes are out on store shelves, we really don’t know how they’ll do — or who will make money. Microsoft might well be designing a piece of hardware that’s so versatile and fun to use that buyers will overlook the issues with game ownership and online check-ins. Its aggressive move towards an all-digital, entertainment-above-all platform might cause it to rake in much more money, causing Sony to attempt to follow suit. It’s already happened to a degree; after extolling the virtues of its free online multiplayer with PlayStation 3, Sony is following Microsoft by charging for online gaming on PS4.

Or maybe Xbox One will indeed totally fail at retail and it’ll be Microsoft scrambling to catch up. One wonders if there is a Third Console Rule emerging here: Any maker of game platforms that enjoys two successful machines will invariably think themselves invincible and make power-mad decisions in the design of the third machine that doom it. Nintendo ruined Nintendo 64 by selfishly sticking to cartridges versus CDs. Sony created an overengineered boondoggle with an astronomical price tag and crappy games. In the eyes of gamers, Xbox One costs $100 more than PS4 and does less.

So is Xbox One a clunker and PlayStation 4 the clear victor, or has Sony made itself weaker in the long run for the purpose of scoring a few short-term points?

I don’t know, and neither do you. And we won’t really know until we get the chance to plug these things in and see what they do. It’s very easy to stand on a stage and make grandiose promises, and a much different thing to deliver results.